“Eighty percent of what your readers buy comes across one of my machines on its way to the store,” said Lancaster, who is CEO of Lantech. Customers include international consumer companies such as Proctor & Gamble Co., The Coca-Cola Co. and giant breweries.

“We touch a huge percentage of products that move as any sort of packaged goods, and we were hit like all the other capital equipment companies,” he said.

Yet, Lancaster sees not only his company, but all strong American businesses, coming out of this recession more efficient and ready to invest in capital equipment after having been on cruise control during boom times.

“I feel better about the prospects of this country’s competitiveness than I did three, four or five years ago,” he said. “I’m not the only one thinking about getting the cost structure of my company under control. People are focused on their ‘knitting,’ making what happens in their four walls better.

“You take that times a bunch of business, and it’s a big deal in terms of the competitiveness of this country.”

Not that it’s been fun. And not that the economy is back.

Lancaster said 2008 started out well on pace to top his 37-year-old company’s best year ever, 2007, when Lantech had about $120 million in gross revenue. As of May 2008, orders were up 17 percent over May 2007.

But in mid-2008, business slowed dramatically, first in the United States, then in Europe and Asia.

“When Asia dropped, it didn’t just drop. It stopped,” Lancaster said.

Companies that were leveraged and took 5 percent to 50 percent revenue hits are dead, or they’re in the process of dying, Lancaster said.

Companies with manageable debt, such as Lantech, suddenly had the time and incentive to start restructuring and investing in their businesses. Lantech has no impetus to keep cash in the bank drawing 1 percent, he said.

“We’re making way bigger investments in our business than (before the downturn). This is not money-management time. This is the time to invest in product development … to improve long-term competitiveness.”

But last fall, it was time to cut staff so that Lantech didn’t start losing money. Lantech has had to cut its local staff to about 300 people, Lancaster said.

Lancaster declined to say how many people he was forced to cut, but the company had 350 employees in Louisville last year, according to Business First’s Aug. 29 list of the area’s largest manufacturing firms.

“We just dropped (the work force) to break even,” Lancaster said. “We didn’t want to (lose money) and set ourselves up for being weaker against the competition. We cut not to hold our profitability percentage, but just to break even.”

Remaining staff started rethinking how Lantech is run, “making hundreds if not thousands of decisions,” he said.

The money saved —hundreds of thousands of dollars per month in non-payroll expenses — kept the company from drastically cutting its work force, Lancaster said.

So far this year, business is still flat, though Lancaster said his orders ticked up in during the last three or four weeks.

Business in Europe, which didn’t drop off until the fourth quarter of last year, already has stabilized. “The drop (in orders) clearly stopped at end of first quarter,” he said.

That said, it’s a different world than 2007 for Lantech. Segment by segment, there are haves and have-nots, according to Lancaster.

Food and beverage companies, health and beauty product companies — that sector never faltered, he said. “Those customers have money,” he said. “Their businesses are just as strong or stronger than before recession.”

But they stopped ordering capital goods such as his just because of “fear and fear only. And now they’re buying again.”

But electronic luxury goods such as big-screen television makers are hurting, he said.

And auto suppliers? “There’s no reason to talk to them,” Lancaster said.

As of mid-June, Lancaster said his orders from India and China are increasing again. “Not at the rate of 2007 or 2008. But in the new ‘normal,’ we’re doing well.”